EXHIBIT 10.20
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (this "Agreement") is made and entered into as of
the 1st day of September, 1998, by and between WEBMD, INC., a Georgia
corporation f/k/a Endeavor Technologies, Inc. (the "Company"), and MATRIA
HEALTHCARE, INC., a Delaware corporation (the "Purchaser").
1. SALE AND ISSUANCE OF SECURITIES.
1.1 Sale of Shares. Subject to the terms and conditions hereof, at the
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Closing (defined in Section 2.1) the Company shall issue and sell to Purchaser,
and Purchaser shall purchase from the Company, one hundred thirty-four thousand
(134,000) shares (the "Purchased Shares") of Series A Preferred Stock, no par
value per share (the "Preferred Stock"), for the purchase price provided in
Section 1.2 below.
1.2 Purchase Price. The purchase price for the Purchased Shares shall be
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fifteen dollars ($15.00) per share, or an aggregate of two million ten thousand
dollars ($2,010,000) (the "Purchase Price"). The Purchase Price shall be paid
at the Closing via wire transfer.
1.3 Issuance of Warrant. On the Closing Date, the Company shall issue to
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Purchaser, for no additional consideration, a warrant in the form of Exhibit 1.3
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attached hereto (hereinafter, the "Warrant") dated the Closing Date initially
providing for the purchase of shares of Preferred Stock. The Warrant shall be
immediately vested and exercisable for three (3) years following the issue date
thereof and shall entitle the holder to purchase 60,000 shares of the Preferred
Stock (or Common Stock as provided therein) at an exercise price of $18.00 per
share, subject to adjustment as set forth therein.
The Company shall reserve and keep available for issuance at all times,
free from preemptive rights, such number of its authorized but unissued shares
of the Preferred Stock and its voting Common Stock, no par value and without
series designation (the "Common Stock"), as is sufficient to permit exercise in
full of the Warrant in accordance with the terms thereof and the conversion of
such Preferred Stock into Common Stock. All shares of Preferred Stock and
Common Stock that are so issuable shall, when issued upon exercise, be duly and
validly issued and fully paid and non-assessable.
1.4 Use of Cash Proceeds. The Company, as determined by the Board of
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Directors thereof, shall use the cash proceeds from the sale of the Purchased
Shares for general working capital and to pay expenses associated with the
transactions contemplated by this Agreement in accordance with Section 9.8
hereof. Such cash proceeds shall not be used to retire loans made by
shareholders to the Company or for the redemption of any capital stock of the
Company.
1.5 Agreements. Purchaser agrees at the Closing to enter into the
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agreement described in Section 6.3.
2. CLOSING; DELIVERIES.
2.1 Closing. The closing of the purchase and sale of the Purchased Shares
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(the "Closing") shall be held at the offices of Xxxxxx Xxxxxxx Xxxxx &
Xxxxxxxxxxx, L.L.P., Atlanta, Georgia, or at such other place as the parties may
agree on or before September 1, 1998 (the "Closing Date").
2.2 Deliveries at Closing. At the Closing, the Company shall deliver to
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Purchaser a certificate, registered in Purchaser's name, representing the
Purchased Shares, against payment by Purchaser of the Purchase Price by wire
transfer. The Company shall also deliver such other instruments and documents
as are described in Article 5.
2.3 Issuance of Additional Shares. The parties acknowledge that the
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Company intends to make an initial offering to the public of its Common Stock
pursuant to a registration statement effective under the federal Securities Act
of 1933, as amended (the "Securities Act"), following the Closing Date (the
closing of such offering being referred to hereinafter as the "Initial Public
Offering"). If the Company does not close the Initial Public Offering at an
offering price of at least $18.00 per share (as adjusted for any stock splits,
stock dividends, combinations or the like) on or before the date that is one
hundred eighty (180) days following the Closing Date, the Company shall issue
for no additional consideration to Purchaser 30,000 additional shares of
Preferred Stock without need for any further action by Purchaser; provided that
if the Company closes the Initial Public Offering within such 180-day period,
but does so at an offering price less than $18.00 per share (as adjusted for any
stock splits, stock dividends, combinations or the like), the Company shall
issue for no additional consideration to Purchaser 30,000 shares of Common Stock
in lieu of issuing any Preferred Stock. Furthermore, in the event the Company
fails to close the Initial Public Offering on or before the first anniversary of
the Closing Date, the Company shall issue promptly to Purchaser, for no
additional consideration, an additional 10,000 shares of Preferred Stock without
need for any further action by Purchaser. The numbers of shares of stock
specified in this Section 2.3 shall be adjusted for any stock splits, stock
dividends, recapitalizations or similar events occurring prior to the dates
indicated.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to Purchaser as follows:
3.1 Organization and Standing; Charter and Bylaws. Each of the Company
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and its wholly owned subsidiaries Endeavor Technologies, Inc. (formerly known as
Quality Diagnostic Services, Inc.) and Telemedics, Inc. (each, a "Subsidiary"
and, collectively, the "Subsidiaries") is a corporation duly organized and
validly existing under, and by virtue of, the laws of the State of Georgia and
in good standing under such laws. The Company has previously delivered to
Purchaser true and accurate copies of the Articles of Incorporation, as amended
(the "Articles"), and Bylaws, as presently in effect, of the Company.
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3.2 Corporate Power. The Company has all requisite legal and corporate
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power and authority to enter into this Agreement and to sell the Purchased
Shares and to carry out and perform its other obligations under the terms of
this Agreement.
3.3 Subsidiaries and Affiliates. Except as set forth in Exhibit 3.3
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attached hereto, the Company does not own or control, directly or indirectly,
any interest or investment in any corporation, partnership, association or other
form of business entity.
3.4 Capitalization. Immediately prior to the Closing Date, the authorized
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capital stock of the Company shall consist of 107,000,000 shares of capital
stock, of which (a) 75,000,000 shares are designated as Common Stock, voting and
without par value per share, of which 3,000,000 are issued and outstanding; (b)
3,000,000 have been designated as Common Stock Series B, nonvoting and without
par value per share, of which 1,400,000 are issued and outstanding; (c)
1,500,000 shares have been designated as Common Stock Series C, nonvoting and
without par value per share, of which 1,500,000 are issued and outstanding; (d)
15,000,000 shares have been designated as Common Stock Series D, nonvoting and
without par value per share, of which 4,406,805 are issued and outstanding; (e)
2,500,000 shares have been designated as Common Stock Series E, nonvoting and
without par value per share, of which 2,100,000 are issued and outstanding; and
(f) 10,000,000 shares of preferred stock, of which 1,600,000 shares have been
designated as Preferred Stock and of which 667,000 shares are issued and
outstanding. All such issued and outstanding shares have been duly authorized
and validly issued, are fully paid and nonassessable, are owned beneficially and
of record by the shareholders and in the amounts set forth in Exhibit 3.4
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attached hereto and, except as set forth in Exhibit 3.4, have been offered,
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issued, sold and delivered by the Company in compliance with applicable federal
and state securities laws. Except as shown in Exhibit 3.4, there are no
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outstanding rights, options, warrants, conversion rights or agreements for the
purchase or acquisition from the Company or any Subsidiary of any shares of its
respective capital stock other than the rights created by this Agreement.
3.5 Authorization. All corporate action on the part of the Company and
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its directors, officers and shareholders necessary for (i) the authorization,
execution, delivery and performance of all its obligations under this Agreement
and any document contemplated hereby, (ii) the authorization, issuance and
delivery by the Company of the Purchased Shares, the Warrant, the shares of
Preferred Stock or Common Stock, as the case may be, issuable upon exercise of
the Warrant (the "Warrant Shares"), and the additional shares of Preferred Stock
or Common Stock, as the case may be, pursuant to the terms of Section 2.3 hereof
(the "Additional Shares") and (iii) for the authorization and reservation of the
shares of the Common Stock issuable upon conversion of all such Preferred Stock
pursuant to the terms of the Company's Articles of Incorporation (the
"Conversion Shares"), has been (or will be) taken prior to the Closing. This
Agreement constitutes the valid and binding obligation of the Company and is
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency or other laws affecting the enforcement
of creditors' rights generally, and except that the availability
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of the remedy of specific performance or other equitable relief is subject to
the discretion of the court before which any proceeding therefor may be brought.
3.6 Validity of Stock. The Purchased Shares, the Warrant Shares and the
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Additional Shares, when issued, sold and delivered in compliance with the
provisions of this Agreement, will be validly issued, fully paid and
nonassessable, will be free of any liens or encumbrances, and will not be
subject to any preemptive rights, rights of first refusal or redemption rights,
other than as provided herein and in the Articles. The Conversion Shares have
been duly and validly reserved, and neither they nor the issuance thereof are
subject to any preemptive rights or rights of first refusal or redemption
rights, and, upon issuance, they will be validly issued, fully paid and
nonassessable.
3.7 Disclosure. No representation or warranty by the Company in this
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Agreement or in any written statement or certificate (excluding any draft
registration statement) furnished to Purchaser in connection with the
transactions contemplated by this Agreement contains, or will contain, any
untrue statement of a material fact or omits, or will omit, to state a material
fact necessary to make the statements made not misleading in light of the
circumstances under which they were made.
3.8 Financial Statements. The Company has furnished Purchaser with (a)
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audited consolidated balance sheets of the Company and its subsidiaries as of
December 31, 1996 and 1997, together with audited consolidated statements of
income and cash flows for the three-year period ended December 31, 1997, and (b)
an unaudited consolidated balance sheet of the Company as of June 30, 1998,
together with unaudited consolidated statements of income and cash flow for the
six-month period then ended (the "Interim Financial Statements"; all the
foregoing financial statements being collectively referred to hereafter as the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied and fairly present the financial position of the Company and the results
of its operations as of the dates and for the periods indicated, subject, in the
case of the Interim Financial Statements, to normal year-end adjustments (which
will not deviate materially from the other financial statements) and the absence
of footnotes.
3.9 Changes. Except as disclosed in Exhibit 3.9 attached hereto and
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except for any changes resulting from the sale of substantially all of the
assets of the Subsidiaries to Purchaser on July 21, 1998, effective as of July
1, 1998, and as disclosed in the Interim Financial Statements, since the date of
the Interim Financial Statements, there has not been:
3.9.1 any change in the assets, liabilities, financial condition, or
operations of the Company considered in the aggregate from that reflected in the
Interim Financial Statements, except changes in the ordinary course of business
that have not been, either individually or in the aggregate, materially adverse;
3.9.2 any materially adverse change (individually or in the
aggregate), except in the ordinary course of business, in the contingent
obligations of the Company by way of guaranty, endorsement, indemnity, warranty,
or otherwise;
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3.9.3 any damage, destruction, or loss that had a material adverse
effect on the properties or business of the Company, whether or not covered by
insurance;
3.9.4 any loans made by the Company to its employees, officers, or
directors or members of their immediate families other than travel and other
commercially reasonable advances made in the ordinary course of business;
3.9.5 any increases in the compensation of any of the Company's
officers or directors;
3.9.6 any declaration or payment of any dividend or other
distribution of the assets of the Company;
3.9.7 any other event or condition of any character that has had a
material adverse effect on the business of the Company; or
3.9.8 any agreement or commitment by the Company to do any of the
things described in this Section 3.9.
3.10 Material Liabilities. Except (a) as disclosed in Exhibit 3.10
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attached hereto or as reflected in the Interim Financial Statements, (b) for the
obligations and liabilities incurred in the ordinary course of business since
the date of the Interim Financial Statements, and (c) for obligations under
contracts made in the ordinary course of business that would not be required by
GAAP to be reflected in the Interim Financial Statements, neither the Company
nor any Subsidiary has any material liabilities or obligations, absolute or
contingent.
3.11 Contracts and Commitments. Other than this Agreement or as set forth
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in Exhibit 3.11 attached hereto, neither the Company nor any Subsidiary has any
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contracts, agreements or instruments to which it is a party and that involve
either (a) a commitment by, or revenue to, the Company or any Subsidiary in
excess of $25,000 annually, or (b) provisions restricting or affecting the
development, manufacture or distribution of the Company's or any Subsidiary's
products or services. Except as set forth in Exhibit 3.11, all contracts,
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agreements or instruments to which the Company or any Subsidiary is a party are
valid and binding upon the Company or the respective Subsidiary, as the case may
be, and the other parties thereto and are in full force and effect and
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting creditors' rights and to general equitable principles, and none of
the Company, any Subsidiary or, to the Knowledge of the Company (as defined in
Section 9.9 hereof), any other party to any such contract, agreement or
instrument has breached any provision of, or is in default under, the terms
thereof, and there are no claims or allegations of offset, defense, or
counterclaims that would prevent the work in process of any of the Company and
the Subsidiaries or its contracts and agreements from maturing in due course
into fully collectible accounts receivable. Except as set forth on Exhibit
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3.11, each of the Company and the Subsidiaries has complied with all
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applicable statutes, ordinances, rules, regulations and orders relating to
seeking, bidding, obtaining, performing under or otherwise complying with,
contracts with governmental and quasi-governmental authorities, agencies or
other entities.
3.12 Protection of Intellectual Property Generally. Exhibit 3.12 hereto
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sets forth a complete and correct list and summary description of all registered
and material unregistered trademarks, trade or company names, service marks,
service names, brand names and registrations, if any, therefor; all registered
copyrights; and all patents and all patent applications, if any, in each case
applicable to or used or intended to be used in the business of any of the
Company and the Subsidiaries, together with a complete list of all licenses
granted by or to each of the Company and the Subsidiaries with respect to any of
the above. The Company has filed an application in the United States Patent and
Trademark Office for registration of WebMD as a service xxxx (which application
has been initially denied), but otherwise neither the Company nor any Subsidiary
has sought governmental protection by way of patent, trademark or copyright
registration or application for the property listed in Exhibit 3.12 hereto.
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Each of the Company and the Subsidiaries validly owns or is validly licensed to
use all inventions, processes, know-how, formulas, patterns, designs, and trade
secrets that are used in the conduct of its business as now conducted. All such
rights and all rights listed in Exhibit 3.12 hereto are valid and enforceable
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and are free from any security interest, lien or encumbrance or any default on
the part of any of the Company and the Subsidiaries, and are not now involved in
any pending or, to the knowledge of the Company, threatened interference
proceeding. No option, license, sublicense or other agreement has been granted
in respect of any patent, trademark, brand name, trade secret, copyright or
pending application therefor listed in Exhibit 3.12 hereto, except as noted in
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Exhibit 3.12. Except as set forth on Exhibit 3.12, none of the Company's or any
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Subsidiary's owned intellectual property infringes any patent, trademark,
service xxxx, trade or company name or application therefor or any related
technological right of any other person. None of the rights of any of the
Company and the Subsidiaries described in this Section 3.12 will be impaired in
any way by the transactions provided for herein, and all of such rights will be
fully enforceable by each of the Company and the Subsidiaries after the Closing
Date without the consent or agreement of any other party. Neither the Company
nor any Subsidiary believes it is or will be necessary to utilize any inventions
of any of its employees (or individuals it currently intends to hire) made prior
to their employment by any of the Company and the Subsidiaries.
3.13 Compliance with Other Instruments. The execution, delivery and
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performance of and compliance with this Agreement and the issuance of the
Purchased Shares, the Conversion Shares, the Warrant Shares and any Additional
Shares will not result in any violation or be in conflict with or constitute a
default under any of the terms or provisions of the Articles or bylaws of the
Company or any Subsidiary's Articles of Incorporation or bylaws, or any
mortgage, indenture, contract, agreement or instrument to which the Company or
any Subsidiary is a party, or result in the creation of any mortgage, pledge,
lien, encumbrance or charge upon any of the properties or assets of any of the
Company and the Subsidiaries pursuant to any such term or provision.
3.14 Litigation and Other Proceedings. Except as disclosed in Exhibit
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3.14 attached hereto, there are no actions, proceedings or investigations
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pending against any of the Company
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or the Subsidiaries or their respective properties or shareholders (or, to the
Knowledge of the Company, any basis therefor or threat thereof) that, either in
any case or in the aggregate, could reasonably be expected to result in any
material adverse change in the business or financial condition of any of the
Company or the Subsidiaries or any of their respective properties or assets or
in any material impairment of the right or ability of any of the Company or the
Subsidiaries to carry on their respective businesses as now conducted or as
proposed to be conducted, or in any material liability on the part of any of the
Company or the Subsidiaries, and none that challenges the validity of this
Agreement or any action taken or to be taken in connection herewith. The
foregoing includes, without limiting its generality, actions pending or, to the
Knowledge of the Company, threatened (or any threat thereof) involving the prior
employment of any of the Company's or any Subsidiary's employees or their use in
connection with the Company's or any Subsidiary's business of any information or
techniques allegedly proprietary to any of their former employers.
3.15 Employees. Except as disclosed in Exhibit 3.15 attached hereto, each
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of the Company and the Subsidiaries has no employment contracts with any of its
employees not expressly terminable at will and no collective bargaining
agreements covering any of its employees. Further, neither the Company nor any
Subsidiary has any policies, procedures or handbooks providing for other than
at-will employment. Neither the Company nor any Subsidiary is aware of any
proposed, threatened or actual union organization activity affecting the
Company's or any Subsidiary's current or prospective operations.
3.16 Registration Rights. Except as provided for in Article 8 hereof, and
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in Exhibit 3.16 attached hereto, neither the Company nor any Subsidiary is under
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any obligation to register any of its presently outstanding securities or any of
its securities that may hereafter be issued pursuant to this or any other
existing agreement.
3.17 Governmental Consents. Except for the filing of a Form D with the
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Securities and Exchange Commission (the "Commission") and the State of Georgia,
no consent, approval or authorization of, or registration, declaration,
designation, qualification or filing with, any governmental authority on the
part of any of the Company and the Subsidiaries is required in connection with
the valid execution and delivery of this Agreement, the offer, sale or issuance
of the Purchased Shares by the Company, the issuance by the Company of the
Conversion Shares, or the consummation of any other transaction contemplated
hereby other than as provided by applicable securities laws.
3.18 Other Consents. All consents of any third party and any shareholders
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of any of the Company and the Subsidiaries necessary for the execution, delivery
and performance by each of the Company and the Subsidiaries of this Agreement or
the consummation of the transactions contemplated hereby, including, without
limitation, any consents necessary from Sirrom Investments, Inc., have been
received prior to the Closing.
3.19 Title to Property and Assets. Except as disclosed in Exhibit 3.19
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attached hereto, each of the Company and the Subsidiaries has good and
marketable title to its material properties
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and assets and has good title to all its leasehold interests, in each case
subject to no mortgage, pledge, lien, encumbrance or charge.
3.20 Insurance. Each of the Company and the Subsidiaries has fire and
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casualty insurance policies in an amount sufficient to allow it to replace with
proceeds from such insurance any of its material, tangible properties that might
be damaged or destroyed.
3.21 Licenses and Permits; Compliance with Law. Except as disclosed in
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Exhibit 3.21 attached hereto, each of the Company and the Subsidiaries holds all
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licenses, certificates, permits, franchises and rights from all appropriate
federal, state or other public authorities necessary for the conduct of its
business and the use of its assets. Except as disclosed in Exhibit 3.21
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attached hereto, each of the Company and the Subsidiaries has conducted, and is
presently conducting, its business so as to comply in all material respects with
all applicable statutes, ordinances, rules, regulations and orders of any
governmental authority. Further, neither the Company nor any Subsidiary is
presently charged with or, to the knowledge of the Company, under governmental
investigation with respect to, any actual or alleged violation of any statute,
ordinance, rule or regulation. To the Knowledge of the Company, neither the
Company nor any Subsidiary is presently the subject of any pending or, to the
knowledge of the Company, threatened adverse proceeding by any regulatory
authority having jurisdiction over its business, properties or operations.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in the termination of any such
license, certificate, permit, franchise or right held by any of the Company and
the Subsidiaries.
3.22 Tax Matters. Except as disclosed in Exhibit 3.22 attached hereto,
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each of the Company and the Subsidiaries has accurately prepared and timely
filed all income and other tax returns, if any, that are required to be filed,
and has paid, or made provision for the payment of, all taxes that have or may
have become due pursuant to said returns or pursuant to any assessment that has
or may be received from any taxing authority for the period through the date of
the Interim Financial Statements, and there are no outstanding agreements by any
of the Company and the Subsidiaries for the extension of time for the assessment
of any tax. The United States income tax returns of each of the Company and the
Subsidiaries (if any) have not been audited by the Internal Revenue Service.
Except as disclosed in Exhibit 3.22, no deficiency assessment or proposed
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adjustment of the Company's or any Subsidiary's United States income tax or
state or municipal taxes (if any) is pending, and the Company has no Knowledge
of any proposed liability for any tax to be imposed upon the Company's or any
Subsidiary's properties or assets for which there is not an adequate reserve
reflected in the Interim Financial Statements.
3.23 Employment; No Conflicting Agreements. Except as disclosed in
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Exhibit 3.23 attached hereto, none of the officers, directors, and key employees
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of any of the Company and the Subsidiaries is obligated under any contract
(including licenses, covenants, or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would conflict with his or her obligation to use his
or her best efforts to promote the interests of any of the Company and the
Subsidiaries or that would conflict with the business of any of the Company and
the Subsidiaries as any of the Company and the Subsidiaries presently conducts,
or presently proposes to conduct, the same.
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3.24 Indebtedness to Directors and Officers; Interested Party
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Transactions. Except as disclosed in Exhibit 3.24 attached hereto, neither the
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Company nor any Subsidiary is indebted to any of its directors or officers or
party to any contract with any affiliate of its directors or officers, and, to
the Knowledge of the Company, none of such directors or officers has a claim of
any nature against any of the Company and the Subsidiaries except for
compensation due for past or current pay periods. To the Knowledge of the
Company and except as disclosed in Exhibit 3.24, no officer, director or holder
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of more than five percent (5%) of the capital stock of any of the Company, the
Subsidiaries or any "affiliate" or "associate" (as these terms are defined in
Rule 405 promulgated under the Securities Act) of any such person or entity or
any of the Company and the Subsidiaries has or has had, either directly or
indirectly, (a) an interest in any person or entity that (i) furnishes or sells
services or products that are furnished or sold or are proposed to be furnished
or sold by any of the Company and the Subsidiaries , or (ii) purchases from or
sells or furnishes to any of the Company and the Subsidiaries any goods or
services, or (b) a beneficial interest in any contract or agreement to which any
of the Company and the Subsidiaries is a party or by which it may be bound or
affected. Except as set forth in Exhibit 3.24 hereto, there are no existing
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material arrangements or proposed material transactions between any of the
Company and the Subsidiaries and any officer, director, or holder of more than
five percent (5%) of the capital stock of any of the Company and the
Subsidiaries or any affiliate or associate of any such person.
3.25 Employee Plans. Exhibit 3.25 attached hereto lists all employee
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benefit plans as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA") and all severance, bonus, retirement, pension,
profit-sharing, deferred compensation plans and other similar fringe or employee
benefit plans, programs or arrangements, and all employee or compensation
agreements, written or otherwise, for the benefit of or relating to any employee
of any of the Company and the Subsidiaries (collectively, "Employee Plans").
None of the Company, the Subsidiaries, and any of their respective officers or
directors has taken any action, directly or indirectly, to obligate any of the
Company and the Subsidiaries to adopt any additional Employee Plans. Each of
the Company and the Subsidiaries has complied with all terms and conditions of
the Employee Plans the violation of which would have a material adverse effect
on the business, as currently conducted or as any of the Company and the
Subsidiaries presently proposes to conduct it, and assets of any of the Company
and the Subsidiaries.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to the Company as follows:
4.1 Access to Information. Purchaser acknowledges that all documents,
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records, and books pertaining to the Company have been made available for
inspection by Purchaser. Purchaser has a pre-existing business or personal
relationship with the Company or with one or more of the Company's officers,
directors or controlling persons. Purchaser and its advisor or advisors, or a
person or persons acting on their behalf, have had a reasonable opportunity to
ask questions of and receive answers from the officers of the Company,
concerning the terms and conditions of the offering of the Purchased Shares and
the Warrant, and to obtain additional information, to the extent possessed or
obtainable without unreasonable effort or expense by the
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officers of the Company. All such questions have been answered to the full
satisfaction of Purchaser.
4.2 Experience; Investment. Purchaser has such knowledge and experience
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in financial and business matters as to enable Purchaser (a) to utilize the
information made available to it in connection with the offering of the
Purchased Shares and the Warrant, (b) to evaluate the merits and risks
associated with a purchase of the Purchased Shares and the Warrant, and (c) to
make an informed decision with respect thereto. Purchaser's business and
financial experience is such that the Company could reasonably assume Purchaser
has the capacity to protect its own interests in connection with the offer, sale
and issuance of the Purchased Shares and the Warrant. Purchaser is acquiring
the Purchased Shares and the Warrant solely for its own account, not as a
nominee or agent, and not with a view to, or for sale in connection with, any
distribution thereof. Purchaser is an "accredited investor" within the meaning
of Regulation D promulgated by the Commission under the Securities Act by reason
of being a corporation with assets in excess of $5,000,000.
4.3 Registration Under the Securities Act. Purchaser understands that (a)
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neither the offering nor the sale of the Purchased Shares and the issuance of
the Warrant has been registered under the Securities Act or applicable state
securities laws, in reliance upon exemptions from the registration provisions of
the Securities Act and applicable state securities laws, (b) the Purchased
Shares purchased by Purchaser and the Warrant issued to the Purchaser must be
held by it indefinitely unless the sale or transfer thereof is subsequently
registered under the Securities Act and applicable state securities laws or an
exemption from such registration is available, and the certificates or documents
representing all Purchased Shares and the Warrant will be legended to reflect
such restrictions, (c) except as provided in Article 8 hereof, the Company is
under no obligation to register any Purchased Shares, Additional Shares,
Conversion Shares or the Warrant Shares on Purchaser's behalf or to assist it in
complying with any exemption from registration, and (d) the officers of the
Company will rely upon the representations and warranties made by Purchaser in
this Agreement in order to establish such exemption from the registration
provisions of the Securities Act and applicable state securities laws.
4.4 Transfer. Purchaser will not transfer the Warrant or any Purchased
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Shares, Additional Shares, Warrant Shares or Conversion Shares without
registration under the Securities Act and applicable state securities laws
unless the transfer is exempt from registration under the Securities Act and
such laws and is made in compliance with the legends contemplated by Section
9.11 herein.
4.5 Authorization. All action on the part of Purchaser necessary for the
-------------
authorization, execution, delivery and performance of all obligations of
Purchaser under this Agreement has been (or will be) taken prior to the Closing.
This Agreement, when executed and delivered by Purchaser, will constitute the
valid and binding obligation of Purchaser and is enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors'
rights generally, and except that the availability of the remedy of specific
performance or other equitable relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
10
5. CONDITIONS TO CLOSING OF PURCHASER.
The obligation of Purchaser to purchase and pay for the Purchased Shares at
the Closing is subject to the fulfillment to its satisfaction on or prior to the
Closing Date of the following conditions:
5.1 Representations and Warranties Correct. The representations and
--------------------------------------
warranties made by the Company in Article 3 hereof shall be true and correct in
all respects when made and shall be true and correct on such Closing Date with
the same force and effect as if they had been made on and as of said date.
5.2 Performance. All covenants, agreements and conditions contained in
-----------
this Agreement to be performed or complied with by the Company on or prior to
the Closing Date shall have been performed or complied with in all respects.
5.3 Compliance Certificate. Unless the Closing Date is the same as the
----------------------
date of this Agreement, Purchaser shall have received a certificate executed by
the President of the Company, dated as of the Closing Date, certifying that the
conditions specified in Sections 5.1 and 5.2 hereof have been fulfilled.
5.4 Opinion of Company's Counsel. Purchaser shall have received from
----------------------------
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P., counsel to the Company, in form and
substance satisfactory to Purchaser and its counsel, a favorable opinion
addressed to Purchaser, dated as of the Closing Date, substantially in the form
set forth in Exhibit 5.4 attached hereto.
-----------
5.5 Evidence of Consents. The Company shall have given Purchaser
--------------------
evidence satisfactory to Purchaser that it has received all necessary consents
of third parties and shareholders of the Company pursuant to Section 3.18
hereof.
6. CONDITIONS TO CLOSING OF THE COMPANY.
The obligation of the Company to sell the Purchased Shares at the Closing
is subject to the fulfillment on or prior to the Closing Date of the following
conditions:
6.1 Representations and Warranties Correct. The representations and
--------------------------------------
warranties made by Purchaser in Article 4 hereof shall be true and correct in
all respects when made and shall be true and correct on such Closing Date with
the same force and effect as if they had been made on and as of said date.
6.2 Performance. All covenants, agreements and conditions contained in
-----------
this Agreement to be performed by or complied with by Purchaser on or prior to
such Closing Date shall have been performed or complied with in all respects.
11
6.3 Joinder Agreement to Restated Shareholders Agreement. Purchaser shall
----------------------------------------------------
have executed a Joinder Agreement, in the form set forth in Exhibit 6.3 attached
-----------
hereto, to that certain Restated Shareholders Agreement dated October 18, 1996,
as amended from time to time.
7. COVENANTS.
7.1 Basic Information and Access. Subject to Section 7.2:
----------------------------
7.1.1 As soon as practicable after the end of each fiscal year, and
in any event within ninety (90) days after each fiscal year beginning with the
year ending December 31, 1998, the Company shall furnish to Purchaser audited
consolidated balance sheets of the Company and its subsidiaries, if any, as of
the end of such fiscal year and audited consolidated statements of income and
cash flow of the Company and its subsidiaries, if any, for such fiscal year,
prepared in accordance with GAAP consistently applied and setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and certified by Ernst & Young, LLP or another independent
public accounting firm, which shall also be one of the six largest firms of
nationally recognized standing in the United States, a recognized regional firm
or a firm acceptable to Purchaser.
7.1.2 As soon as practicable after the end of each fiscal quarter,
and in any event within forty-five (45) days thereafter, the Company shall
furnish to Purchaser consolidated balance sheets of the Company and its
subsidiaries, if any, as of the end of such fiscal quarter, and consolidated
statements of income and cash flow of the Company and its subsidiaries, if any,
for such fiscal quarter and for the current fiscal year to date, prepared in
accordance with GAAP consistently applied, with such statements certified by the
chief financial officer of the Company as having been prepared in accordance
with GAAP consistently applied, and accompanied by a brief narrative description
of the Company's business activities during said quarter.
7.2 Suspension of Certain Covenants. The covenants set forth in Article
-------------------------------
7, except those in Section 7.3, shall be suspended and be of no force or effect
if the Company becomes subject to the reporting requirements of the federal
Securities Exchange Act of 1934, as amended (the "Securities Exchange Act");
provided that such covenants shall once again apply in the event the Company
ceases to remain subject to such requirements and if at such time the Purchaser
owns Purchased Shares, Warrant Shares, Conversion Shares or any Additional
Shares.
7.3 Confidentiality. Purchaser agrees that it will keep confidential and
---------------
will not disclose, divulge or use any confidential, proprietary or secret
information that Purchaser may obtain from the Company, and that the Company has
marked "confidential," "proprietary" or "secret" or has otherwise identified as
being such, pursuant to financial statements, reports and other materials
submitted by the Company pursuant hereto or pursuant to the provisions of
Section 7.1 (the "Confidential Information"); provided that the term
Confidential Information shall not include any information supplied by the
Company that (a) on the date hereof or thereafter becomes generally available to
the public other than as a result of a disclosure, directly or indirectly, by
Purchaser; (b) is disclosed by Purchaser with the prior written consent of the
Company; (c) was
12
available to Purchaser on a non-confidential basis from a source other than the
Company prior to its disclosure to Purchaser by the Company; or (d) becomes
available to Purchaser on a non-confidential basis from a source other than the
Company; provided further, that, with regard to clauses (c) and (d), the source
was not himself or itself known by Purchaser to be bound by a confidentiality
agreement, fiduciary duty or other obligation of confidentiality with the
Company and did not receive such information, directly or indirectly, from a
person or entity so bound.
8. REGISTRATION RIGHTS.
8.1 Certain Definitions. As used in this Agreement, in addition to the
-------------------
terms defined above, the following terms shall have the following respective
meanings:
"Commission" shall have the meaning set forth in Section 3.17 hereof.
"Holders" shall mean Purchaser and any other person holding Registrable
Securities to whom these registration rights have been transferred pursuant to
Section 8.8 hereof.
"Initial Public Offering" shall have the meaning set forth in Section 2.3
hereof.
"Other Shareholders" shall mean persons other than Holders who, by virtue
of agreements with the Company, are entitled to include their securities in a
registration effected pursuant to this Agreement.
The terms "register," "registered" and "registration" refer to the
effectiveness of a registration statement prepared and filed in compliance with
the Securities Act.
"Registrable Securities" as of any particular time shall mean (a) all
Conversion Shares, (b) all Warrant Shares to the extent they consist of Common
Stock, (c) any Additional Shares of Common Stock issued pursuant to Section 2.3
hereof and (d) any additional shares of Common Stock issued with respect to the
Conversion Shares described in (a) and (b) pursuant to any stock split, stock
dividend, recapitalization or similar event, or automatic conversion thereof
into another series of Common Stock pursuant to the provisions of the Articles.
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with Section 8.2 hereof, including, without limitation, all
registration and filing fees; printing expenses; fees and disbursements of
counsel for the Company; reasonable fees and expenses of a single counsel for
the selling Holders; state "blue sky" fees and expenses; and accountants'
expenses, including without limitation any special audits required by the
Commission with respect to any such registration; but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company.
"Securities Act" shall have the meaning set forth in Section 2.3 hereof.
"Securities Exchange Act" shall have the meaning set forth in Section 7.2
hereof.
13
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities and any other securities of the Company being sold in the same
registration as the Registrable Securities by Other Shareholders.
"Warrant Shares" shall have the meaning set forth in Section 3.5 hereof.
8.2 Company Registration.
--------------------
8.2.1 If the Company shall determine to register any of its
securities in connection with the public offering of such securities solely for
cash on a form that would permit the registration of the Registrable Securities
other than on Form X-0, Xxxx X-0 or another form not available for registering
the Registrable Securities for sale to the public, the Company shall promptly
give to each Holder written notice of such registration (a "Piggyback
Registration"), and shall include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made by any Holder or Holders within fifteen (15) days after
receipt of such written notice from the Company, subject to the underwriter
limitations, if any, described in Subsection 8.2.3 hereof; provided, however,
that no Holder shall have the right to participate in an Initial Public Offering
pursuant to a registration statement declared effective within the twelve (12)-
month period following the Closing Date. The Company shall have the right to
withdraw or cease to prepare or file any registration statement for any offering
referred to in this Subsection 8.2.1 without any obligation or liability to any
Holder.
8.2.2 Number of Piggyback Registrations. Subject to the underwriter
---------------------------------
limitations, if any, described in Subsection 8.2.3 below, each Holder shall be
entitled to have its Registrable Securities included in an unlimited number of
Piggyback Registrations pursuant to this Section 8.2 until such time as all the
Registrable Securities may be resold pursuant to Rule 144 promulgated pursuant
to the Securities Act (or any successor provision).
8.2.3 Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Subsection 8.2.1 hereof. In such event the right of any Holder to
registration pursuant to Subsection 8.2.1 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and Other Shareholders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for underwriting by the
Company. Notwithstanding any other provision of this Section 8.2, if the
underwriter reasonably determines that marketing factors require a limitation on
the number of shares to be underwritten, such reduction in the number of shares
that may be included in the registration shall be made (a) first, to the shares
of the Holders and Other Shareholders requesting registration of securities
pursuant to piggyback registration rights; (b) second, to the shares of the
Company, and
14
(c) third, to the shares of any person other than the Holders requesting
registration of securities pursuant to demand registration rights; all in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities and other securities that such person, Holders and Other Shareholders
had requested to be included in such registration; provided, however, that in no
event shall the total amount of Purchaser's shares of securities included in the
offering pursuant to a Piggyback Registration be less than the number of
securities included in the offering by any other single selling shareholder
pursuant to piggyback registration rights unless all of Purchaser's shares of
securities are included in the offering. The Company shall advise all holders of
securities requesting registration as to the number of shares or securities that
may be included in the registration and underwriting as allocated in the
foregoing manner. No such reduction shall be made with respect to securities
offered by the Company for its own account. If any Holder or Other Shareholder
disapproves of the terms of any such underwriting, such person may elect to
withdraw therefrom by written notice to the Company and the underwriter. Any
Registrable Securities or other securities excluded or withdrawn from such
underwriting shall also be withdrawn from such registration.
8.3 Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with any registration, qualification or compliance pursuant to this
Agreement shall be borne by the Company; and all Selling Expenses shall be borne
by the Holders, the Other Shareholders of the securities so registered and the
Company, to the extent of securities registered on its behalf, pro rata on the
basis of the number of their shares so registered; provided, however, that if
any jurisdiction in which the securities shall be qualified shall require that
expenses incurred in connection with the qualification of the securities in that
jurisdiction be borne by the selling shareholders, then such expenses shall be
payable by the selling shareholders pro rata to the extent required by such
jurisdiction.
8.4 Registration Procedures. In the case of each registration effected by
-----------------------
the Company pursuant to this Agreement, the Company shall keep each Holder
advised in writing as to the initiation of each registration and as to the
completion thereof. At its expense the Company shall use its best efforts to:
8.4.1 keep such registration effective for a period of one hundred
eighty (180) days or until the Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs; and
8.4.2 furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request.
8.5 Indemnification.
---------------
8.5.1 With respect to each Holder whose securities have been
registered pursuant to this Agreement, the Company shall indemnify such Holder,
each of such Holder's officers, directors and partners, and each person
controlling (as defined in Subsection 8.5.4 below) such Holder and each of such
controlling person's officers, directors and partners, and shall also
15
indemnify each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on (a) any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, (b) any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (c) any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and shall reimburse each such Holder
and each person controlling such Holder, and each of such controlling person's
officers, directors and partners, each of its officers, directors and partners,
each such underwriter, and each person who controls such underwriter, for any
legal and other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such claim, loss, damage, liability or expense arises out of or is based upon
written information furnished to the Company by such Holder or on behalf of such
Holder by the officers, directors or partners of such Holder seeking to be
indemnified, where such information is stated to be specifically for use in such
prospectus, offering circular or related document.
8.5.2 Each Holder and Other Shareholder shall, if securities held by
him or it are included among the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
(as defined in Subsection 8.5.4 below) the Company or such underwriter, and each
other such Holder and Other Shareholder and each of such controlling person's
officers, directors and partners, and each person controlling such other Holder
or Other Shareholder and each of such controlling person's officers, directors
and partners, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
the Company, such other Holders, Other Shareholders, directors, officers,
partners, persons, each underwriter and each person who controls such
underwriter for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder or Other Shareholder specifically for
use therein; provided, however, that the obligations of such Holder or Other
Shareholder hereunder shall be limited to an amount equal to the proceeds to
such Holder or Other Shareholder of securities sold as contemplated herein.
16
8.5.3 Each party entitled to indemnification under this Section 8.5
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be withheld unreasonably). The Indemnified Party may participate in such
defense with counsel of its own choosing, but the fees and expenses of such
counsel shall be at such Indemnified Party's expense unless (i) the Indemnifying
Party and the Indemnified Party shall have agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnified Party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential conflicting interests between them. The failure of
any Indemnified Party to give notice as provided herein shall relieve the
Indemnifying Party of its obligations under this Section 8.5 only if such
failure is prejudicial to the ability of the Indemnifying Party to defend such
action, and such failure shall in no event relieve the Indemnifying Party of any
liability that he or it may have to any Indemnified Party otherwise than under
this Section 8.5. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability with respect to such claim or
litigation.
8.5.4 For purposes of this Section 8.5, the term "control" shall have
the meaning assigned thereto under the Securities Act.
8.6 Information by Holders and Other Shareholders. Each Holder or Other
---------------------------------------------
Shareholder of securities included in any registration shall furnish to the
Company such information regarding such Holder or Other Shareholder and the
distribution proposed by such Holder or Other Shareholder as the Company may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
8.7 Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission that may permit the sale of the
Common Stock to the public without registration, the Company shall, for so long
as Registrable Securities are outstanding:
8.7.1 make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated by the Commission under the
Securities Act ("Rule 144"), at all times after ninety (90) days following the
Initial Public Offering;
8.7.2 file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act at any time after it has become subject to the reporting
requirements thereunder; and
17
8.7.3 so long as any Holder owns any securities constituting or
representing Registrable Securities, furnish to such Holder forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of Rule 144 (at any time after ninety (90) days following
the Initial Public Offering), and of the Securities Act and the Securities
Exchange Act (at any time after it has become subject to the reporting
requirements thereunder), a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed by the Company as
such Holder may reasonably request in availing itself of any rule or regulation
of the Commission allowing such Holder to sell any such securities without
registration.
8.8 Transfer of Registration Rights. All, but not less than all, of the
-------------------------------
rights and obligations granted under this Article 8 to cause the Company to
register the Registrable Securities may be assigned, transferred or otherwise
conveyed, in whole but not in part, by the Purchaser to any person provided that
the Purchaser gives the Company written notice (at the time of, or within a
reasonable time after, such transfer) stating the name and address of such
transferee, and such transferee provides its agreement, in a form reasonably
satisfactory to the Company, to be bound by the provisions of this Article 8.
8.9 "Market Stand-Off" Agreement. If requested by the Company upon the
----------------------------
recommendation of the Board of Directors of the Company and an underwriter of
Common Stock (or other securities) of the Company, the Holders shall not sell
or otherwise transfer or dispose of any Common Stock (or other securities) of
the Company held by them during the one hundred eighty (180)-day period
following the effective date of a registration statement of the Company filed
under the Securities Act, provided that:
(a) such agreement shall apply only with respect to an underwritten
Initial Public Offering; and
(b) Other Shareholders selling securities pursuant to such
registration statement and all officers and directors of the Company enter into
similar agreements.
Such agreement shall be in writing in form satisfactory to the Company and
such underwriter. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said one hundred eighty (180)-day period.
9. MISCELLANEOUS.
9.1 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of Georgia, without regard to its principles of
conflicts of laws.
9.2 Survival. The representations, warranties, covenants and agreements
--------
made herein shall survive any investigation made by Purchaser and the closings
of the transactions contemplated hereby.
18
9.3 Assignment. This Agreement may not be assigned by operation of law or
----------
otherwise without the express written consent of the Company and the Purchaser
(which consent may be granted or withheld in the sole discretion of the Company
or the Purchaser); provided, however, that the Purchaser may, without the
consent of the Company, assign this Agreement to any person who directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with the Purchaser, but no such assignment shall relieve
the Purchaser of any of its obligations under this Agreement; and provided
further, however, that the rights granted pursuant to Article 8 may be
transferred only in accordance with Section 8.8.
9.4 Entire Agreement; Amendment. This Agreement and the other documents
---------------------------
delivered pursuant hereto constitute the full and entire understanding and
agreement among the parties with regard to the subjects hereof and thereof.
Neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated orally, but only by a written instrument signed by the holders of at
least a majority of the Purchased Shares then issued and outstanding (as well as
any shares issued with respect to the same upon any stock split, stock dividend,
recapitalization or similar event) and a representative of the Company so
authorized by its Board of Directors.
9.5 Notices. All notices and other communications required or permitted
-------
hereunder shall be given in writing and shall be deemed effectively given upon
personal delivery or three (3) business days following deposit with the United
States Postal Service, by certified mail, return receipt requested, postage
prepaid, or otherwise delivered by hand or by messenger, addressed;
(a) if to Purchaser:
Matria Healthcare, Inc.
0000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
with a copy to (which shall not constitute notice):
Xxxxx X. Xxxxx, III, Esq.
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
or
(b) if to any other holder of any shares of Preferred Stock, the
Warrant, any Warrant Shares, or Conversion Shares, at such address as such
holder shall have furnished the Company in writing, or, until any such holder so
furnishes an address to the Company, then to and at the address of the last
holder of such shares of Preferred Stock or Conversion Shares who has so
furnished an address to the Company, or
19
(c) if to the Company, at:
WebMD, Inc.
400 The Lenox Building
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
with a copy to (which shall not constitute notice):
L. Xxxxx Xxxxxx, Esq.
Vice President and Corporate Counsel
(same address)
with a copy to (which shall not constitute notice):
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxx IV, Esq.
or at such other address as the Company shall have furnished to Purchaser and
each such other holder in writing.
9.6 Delays or Omissions; Remedies Cumulative. No delay or omission to
----------------------------------------
exercise any right, power or remedy accruing to any party, upon any breach or
default under this Agreement, shall impair any such right, power or remedy of
such party or be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. All
of a party's remedies, either under this Agreement, or by law or otherwise
afforded to such party, shall be cumulative and not alternative.
9.7 Agent's Fees. Each party (a) represents and warrants that it has
------------
retained no finder or broker in connection with the transactions contemplated by
this Agreement (except as disclosed to the other parties hereto as of the date
hereof) and (b) hereby agrees to indemnify and to hold the other parties
harmless of and from any liability for commissions or compensation in the nature
of an agent's, finder's or broker's fee to any broker or other person or firm
(and the cost and expenses of defending against such liability or asserted
liability) for which said party is responsible.
20
9.8 Expenses. Each party shall bear its own expenses and legal fees (and
--------
expenses and disbursements of its legal counsel) incurred on its behalf with
respect to this Agreement and the transactions contemplated hereby.
9.9 Construction of Certain Terms. The titles of the articles, sections,
-----------------------------
and subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement. For purposes of this
Agreement, the terms "Company's Knowledge," "Knowledge of the Company" and
"Knowledge" as applied to the Company means, as to a particular matter, the
actual knowledge of the Company's executive officers (including its two Vice
Presidents of Sales), in-house corporate counsel, and controller. Wherever the
words "including," "include" or "includes" are used in this Agreement, they
shall be deemed followed by the words "without limitation." References to any
gender shall be deemed to mean any gender. All references herein to the
Company's knowledge or awareness shall mean the knowledge of managers and key
employees of the Company.
9.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.11 Legends. In addition to any legends required by the Securities Act
-------
or any applicable state securities laws, the Company shall place the following
legend on the front or back of each certificate evidencing ownership of shares
of Preferred Stock:
The Corporation will furnish without charge to each shareholder who
so requests a statement of the designations, relative rights,
preferences and limitations applicable to each class, and series
within a class, of capital stock of the Corporation and the
variations in rights, preferences and limitations applicable to each
series (and the authority of the Corporation's board of directors to
determine variations for future series).
The Company shall place legends on each certificate evidencing ownership of
shares of Common Stock identical to those initially placed on the certificates
for Preferred Stock relating to the Securities Act and all applicable state
securities laws.
9.12 Enforcement.
-----------
(a) Remedies at Law or in Equity. If the Company shall default in any
----------------------------
of its obligations under this Agreement or if any representation or warranty
made by or on behalf of the Company or Purchaser in this Agreement or in any
certificate, report or other instrument delivered under or pursuant to any term
hereof shall be untrue or misleading in any material respect as of the date of
this Agreement or as of the Closing Date or as of the date it was made,
furnished or delivered, the other parties may proceed to protect and enforce
their respective rights by suit in equity or action at law, whether for the
specific performance of any term contained in this Agreement, injunction against
the breach of any such term or in furtherance of the exercise
21
of any power granted in this Agreement, or to enforce any other legal or
equitable right of such party or to take any one of more of such actions. In the
event any party brings such an action against any other party, the prevailing
party in such dispute shall be entitled to recover from the losing party all
reasonable fees, costs and expenses enforcing any right of such prevailing party
under or with respect to this Agreement, including such reasonable fees and
expenses of attorneys and accountants, which shall include all fees, costs and
expenses of appeals.
(b) Remedies Cumulative; Waiver. No remedy referred to herein or in
----------------------------
any exhibit hereto is intended to be exclusive, but each shall be cumulative and
in addition to any other remedy referred to above or otherwise available to a
party at law or in equity. No express or implied waiver by any party of any
default shall be a waiver of any future or subsequent default. The failure or
delay of any party in exercising any rights granted him or it hereunder shall
not constitute a waiver of any such right and any single or partial exercise of
any particular right by such party shall not exhaust the same or constitute a
waiver of any other right provided herein.
9.13 Timely Performance. Time is of the essence as to the performance of
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the obligations required of the respective parties under this Agreement.
9.14 No Joint Venture. Nothing in this Agreement shall be deemed to
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constitute the Company and Purchaser as partners, agents or joint venturers.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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[SIGNATURES TO INVESTMENT AGREEMENT]
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day and year first above written.
THE COMPANY:
WEBMD, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
PURCHASER:
MATRIA HEALTHCARE, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx
Executive Vice President and
Chief Operating Officer
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List of Exhibits
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1.3 Form of Warrant
3.3 Subsidiaries and Affiliates
3.4 Outstanding Rights, etc. in Respect of Authorized Capital Stock
3.9 Changes Since Date of Interim Financial Statements
3.10 Material Liabilities
3.11 Contracts
3.12 Intellectual Property
3.14 Litigation
3.15 Employment Agreements
3.16 Registration Rights
3.19 Title Exceptions
3.21 Compliance with Laws Exceptions
3.22 Tax Exceptions
3.23 Conflicts of Officers, Directors and Key Employees
3.24 Indebtedness to Directors and Officers; Interested Party Transactions
3.25 Employee Benefit Plans
5.4 Form of Opinion of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
6.3 Form of Joinder Agreement
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